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Discussion Of Empirical Investigations

The discussion in the previous chapters reinforced the notion that the discourse of stakeholder theory as it relates to the management of competing stakeholder interests has emerged as a significant theme in the management literature (Pratt, 1991; Harrison & Freeman, 1999; Bhattacharya, Korschun and Sen, 2008). Hence, the literature abounds with examples of empirical investigations to test the validity of stakeholder theory. Several of these studies have been conducted under the broader theme and rubric of CSR. Thus, in a study conducted by Whitehouse (2006) the author concludes that the context within which CSR has been implemented hinders its potential to offer stakeholders a more efficient means of evaluating its impact on corporate performance.

McWilliams and Siegel (2001) tested several hypotheses that the level of CSR will depend on and conclude that there is an ideal level of CSR, which managers can determine through cost-benefit analysis. The authors also conclude that there is a neutral relationship between CSR and a firm’s financial performance. Bhattacharya, Korschun and Sen (2008) provide some insights that borrow from the literatures on means-end chains and relationship marketing. The authors further provide a conceptual model that explains how CSR provides stakeholders with numerous benefits including psychological, functional and in the domain of values.

It is also suggested that the type and extent to which stakeholders gain access to these benefits from CSR activities influence the quality of the relationship between them and the company. Ogden and Watson (1999) examined the contention of stakeholder theory that a firm can simultaneously enhance the interests of its shareholders and other relevant stakeholders. The results show that although improving relative customer performance is a costly exercise, shareholder returns respond to a significantly positive manner to such improvements.

Lund-Thomsen (2009) assesses the promises and pitfalls of competing approaches to South African industries and in community mobilizing in environmental governance. The author argues that a multilevel approach is necessary to evaluate the impact of CSR and corporate accountability initiatives. However, it is suggested that both approaches fail to address the underlying global-level structural causes of conflicts between MNCs and stakeholders in developing countries. The author calls for fundamental changes in the global economy in order to resolve conflicts between companies and stakeholders.